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The Spanish economy suffered the impact of the Covid-19 coronavirus crisis and fell by 5.2% in the first quarter, its largest quarterly decline recorded in the historical series of the National Statistics Institute (INE), which started in 1970. Until now, the largest quarterly drop in GDP was in the first quarter of 2009 (-2.6%).
This has been confirmed by Statistics with the publication of the National Accounts data for the first quarter, similar to those advanced in late April.
With the sharp drop in GDP in the first quarter, Spain is looming in recession , since two consecutive quarters of negative growth are required for an economy to enter what is considered a technical recession. In any case, a contraction of GDP in the second quarter , greater than that of the first , is taken for granted , because the April-June period was affected by the stoppage of numerous economic activities as a result of the declaration of the state of alarm .
In the three preceding quarters (second, third and fourth quarter of 2019), the Spanish economy had been growing at rates of 0.4%.
In the interannual rate , the GDP for the first quarter contracted 4.1%, compared to the 1.8% rise in the previous quarter. This is the biggest decline since the second quarter of 2009, when the Spanish economy contracted 4.4% year-on-year . No negative GDP data was recorded since the end of 2013.
National demand subtracted 3.7 points from the year-on-year change in GDP in the first quarter, 5 points lower than in the fourth quarter. For its part, external demand subtracted 0.4 points, nine tenths less than in the last quarter.
1996-2020 Annual GDP
Quarterly data shows a drop in household consumption of 6.6% , compared to 0.1% growth in the previous quarter. On the contrary, public spending hit the gas between January and March and grew by 1.8%, its biggest rise in twelve years, specifically since the first quarter of 2008. For its part, consumer spending by non-profit institutions profit and household services increased by 0.8%, five tenths more than in the previous quarter.
The investment , meanwhile, recorded in the first quarter its biggest drop in eleven years (since the second quarter of 2009), to the back between January and March by 5.7%.
The INE points out that the situation caused by the coronavirus makes certain variables, such as the hours actually worked, more relevant at the present time when measuring the evolution of employment. "This variable, compared to equivalent full-time jobs, is considered to be the one that most clearly reflects the employment-induced effects of the Covid-19 outbreak and the subsequent measures taken," he points out.
The use of the economy , in terms of hours worked, fell in the first quarter by 5% compared to the previous quarter. This rate is less than that of full-time equivalent jobs (-1.9%, which is 2.8 points less than in the fourth quarter) due to the reduction observed in the average hours full-time (-3.1%).
In year-on-year terms, hours worked decreased 4.2% , a rate 5.6 points lower than that of the fourth quarter of 2019. Meanwhile, equivalent full-time positions decreased 0.6%, 2.6 points less than in the fourth quarter, which means that 102,000 equivalent full-time jobs have been destroyed in one year.
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